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The role of CEO accounts and perceived integrity in analysts' forecasts

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Skarlicki, D 
Lo, K 
Avolio, BJ 
DeHaas, CA 


Although holding oneself accountable is deemed important for effective leadership, CEOs tend to demonstrate a self-serving tendency when reporting their company’s performance to the financial community. Leaders do so by providing internal accounts for favorable performance and external accounts for unfavorable performance. The effects of this strategy on the financial community’s judgments of a company’s value, however, is frequently mixed. Guided by the actor-observer perspective, we propose that observers (i.e., analysts) are likely to provide higher forecasts for firms whose CEOs attribute unfavorable organizational outcomes to internal factors and favorable outcomes to external factors. Integrating this conceptual perspective with attribution theory, we predicted that CEO accounts will have a stronger influence on analysts’ forecasts when the company performs unfavorably versus favorably. Results of archival data analysis (N = 35,676 quarterly earnings conference calls) generally supported our hypothesis, and were then replicated in a pre-registered follow-up field experiment (Study 2; N = 307), showing that analysts’ perceptions of the leader’s integrity mediated the effects of CEO accounts on analysts’ evaluation of the company. The mediating role of leader integrity was only significant when the company performed unfavorably (versus favorably). The present research adds to theory on causal accounts and perceived leader integrity, while offering guidance on how leaders’ accounts can relate to observers’ evaluations of those leaders and their companies.



CEO causal accounts, CEO perceived integrity, Financial analysts' forecasts, Self-serving bias, Actor -observer perspective

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Organizational Behavior and Human Decision Processes

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This research was supported by the Social Sciences and Humanities Research Council of Canada (SSHRC) awarded to the first author Grant Number: 435-2022-0280.